Global Oil Prices Surge Past US$114, Asian Markets Plunge
Global financial markets experienced severe turmoil on Monday 9 March as global oil prices surged dramatically past US$114 per barrel. The sharp escalation of conflict between the United States and Israel against Iran triggered severe concerns about prolonged disruptions to energy shipments through the Strait of Hormuz.
In Asian markets, Brent crude oil prices soared nearly 24% to US$114.74 per barrel, whilst US crude oil (WTI/Nymex) climbed more than 26% to reach US$114.78 per barrel. This marked the highest level since Russia’s invasion of Ukraine in 2022, with weekly gains reaching 35%—the largest weekly increase in futures trading history since 1983.
The negative sentiment rippled through Asia-Pacific stock exchanges, which fell sharply into the red. Japan’s Nikkei 225 Index dropped over 7%, followed by Hong Kong’s Hang Seng falling more than 3%, and Australia’s ASX 200 declining more than 4%. South Korea’s Kospi Index experienced the steepest losses, plummeting over 8%, which triggered a circuit breaker—a 20-minute temporary trading halt to curb panic selling.
The Strait of Hormuz, which normally carries approximately one-fifth of global oil supplies, has become nearly completely paralysed. Oil tankers are reluctant to traverse the narrow passage due to concerns about Iranian attacks. This situation has forced major Middle Eastern producers to slash production due to insufficient storage capacity.
Iraq reported a 70% collapse in production from three major southern oil fields, dropping to just 1.3 million barrels per day. Kuwait announced production cuts as a precautionary measure against maritime security threats. The UAE began managing offshore production levels to adjust to limited storage capacity.
Amid military tensions, Iran formally appointed Mojtaba Khamenei to succeed his father, Ali Khamenei, as Supreme Leader—a move signalling that hardline factions retain full control of the country.
In response to soaring energy prices, US President Donald Trump stated via Truth Social that short-term oil price increases are an acceptable cost for destroying Iran’s nuclear threat.
“Short-term oil price increases are a very small price to pay for the security and peace of the United States and the World. Only a fool would think otherwise!” Trump wrote.
Meanwhile, US Energy Secretary Chris Wright expressed optimism that traffic through the Strait of Hormuz would soon recover once Iran’s ability to threaten tankers is destroyed. Wright predicted the restoration of shipping flows would take weeks rather than months.
US military operations against Iran in the first week are reported to have cost over US$6 billion. Iran’s Parliamentary Speaker Qalibaf criticised Trump’s miscalculation regarding global oil prices and warned that global energy production faces threats from US-Israeli aggression.
Indonesian migrant workers from East Java in the Middle East region face potential difficulties returning home for the Eid holiday period. The US Department of State ordered non-emergency diplomats to leave Saudi Arabia following drone attacks, whilst the UK prepared evacuation flights from Dubai. Middle East tensions triggered the oil price surge after three ships were attacked in the Strait of Hormuz.